George Osborne arrives at the London Evening Standard offices in Kensington to begin his new job in May 2017.
Photograph: Victoria Jones/PA

The Evening Standard has reported a loss of £10m for last year to the end of September, as the cost of “strategic investment” under new editor George Osborne pushed the London free daily newspaper deep into the red.

Parent company ESI Media, which is controlled by Russian oligarch Evgeny Lebedev, also reported that stablemate the Independent has almost doubled profits to £3.26m in its first full year as a digital-only publication.

The company said the Evening Standard’s swing to a major loss was because it has embarked on a strategic investment programme to develop the brand, editorial product and advertising proposition. It made a £2.2m operating profit in 2016. In 2015, it made £3.3m.

Since his appointment, there has been a comprehensive redesign of the paper and the word “London” has been dropped from the title to reflect greater national and international ambitions. The paper has also invested heavily in the event market, including a London food festival.

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However, the title, which has a circulation of almost 900,000, was also hit hard by the ongoing slump in the advertising market. As a freesheet, it does not have the benefit of additional income from sales of each copy, making it particularly vulnerable.

“We’re investing significantly in the Evening Standard,” said Manish Malhotra, group managing director at ESI Media.

“Although the title has been subject to some broader issues that have impacted on all news brands, the brand is now enjoying strong digital growth and the emergence of a successful events business to complement the print title reinvigorated under George’s editorship.”

Profits at the digital-only Independent increased 94% year-on-year to £3.26m for the year to the end of September. ESI Media said the figures were a “validation of the difficult decision to close the print edition and demonstrates the viability of its online-only model”.

Malhotra said: “The Independent is demonstrating strong growth in profits and turnover following its move to a digital-only business. This is enabling us to continually invest in the brand, particularly in our US presence, to better serve our large, engaged and valuable global audience.”